USA LLC To Keep Profits without paying tax ?

[buxhzk]

Full Disclosure :⁠ THIS IS NOT MY FIRST HAND EXPERIENCE.
Information about Ajman freezone helping for free is⁤ something I know this from a fellow Indian who went through this process on his⁣ own.
My experience : I went through a consulting firm who charged me (and keeps⁢ charging me for silly stuff .. they ask $1k for submitting 1 email few months︀ ago. )

Answers to other questions :

You don't need to speak Arabic. English is︁ just fine.

Why would some freezones help you for free ?

There are many freezones︂ in UAE.
Each freezone is controlled by each state (emirate)
And these freezones are competing︃ against each other to get as much business in their freezone.
Ajman , UAQ etc︄ are small freezones craving for more businesses.

If we choose a freezone like .. lets︅ say for example AJMAN Freezone
Govt. fee we pay go to ajman freezone. So its︆ in their interest to help us.

If we go to a consultancy , we have︇ to pay Govt fees to ajman freezone + consulting company fees.
Having consulting company is︈ good if you dont have time to prepare documents and stuff.
If you are willing︉ to spend some time , that consulting fee can be saved.
Consulting firms try to︊ make money off us most times. I have had bad experiences.

 

[buxhzk]

1 Month for everything.
You get company incorporated .. VISA .. all‍ that in approx 1 month
Due to covid , this may be longer now.
I got all this done in 1 month time.

 

[rowena]

You can apply to all free zones individually(except some special FZs) no need to use‌ agencies. FZ representative is like a salesperson of the FZ. They will inform you about‍ the process and you need to fill the forms. The visa process(medical, fingerprint and visa⁠ stamping) may be a little bit confusing but it is not rocket science. All of⁤ them speaking English.

 

[buxhzk]

Exactly what I heard.
Consulting firms can⁣ make things a bit easy. Thats all.

 

[JustAnotherNomad]

The advantage with the consulting firms is that they have an overview of the market‌ and will be able to inform you about downsides with specific freezones as well. They‍ can also help with things that the freezones don’t offer. So it can still make⁠ sense to use them in the beginning.

 

[sandy56]

@buxhzk I'm in the same boat as you - from India, 3 year old software‌ business with all clients from US. I'm (unexpectedly) very close to crossing the limits for‍ 44ADA this year, and have asked the clients to stop the payments while I figure⁠ out what to do. Since the last week week, I've been looking at setting up⁤ an offshore company. I'm looking at Seychelles, UAE and Mauritius at the moment, but would⁣ love your inputs here. You have setup a UAE company, and I had a few⁢ questions I'd like to ask.

1. How do you manage tax residency of the company? IIRC︀ you'd need to prove that the place of effective management of the company is not︁ India to enjoy 0% tax. As you mentioned, there is also the 240 day requirement.︂ Do you plan to not report said taxes in India?
   
2. I've been told it is︃ easier/cheaper to setup a RAK offshore company than any other Freezone. Is this true?
   
3. How'd you setup the bank accounts? I've heard banks in UAE aren't willing to work with︄ off-shore free-zone companies.
   
4. Would it be as easy to setup a bank account if you︅ don't use an agency, as is being suggested in this thread?
   
5. It seems you're looking︆ to move your company to a different company. Any candidates?
   
6. Which agency did you use?︇ How was your experience?
   
7. Any other advice? Or maybe something to keep in mind that︈ you missed while you went through the process?
   

Thanks for your inputs - they've been︉ very insightful so far.

 

[funk]

All Indians coming here and planning to evade taxes using UAE company as a vehicle‌ should note the following:

1) India - UAE share extremely good relationship especially under Modi‍ regime.
2) AEOI status of UAE https://www.oecd.org/tax/automatic-exchange/commitment-and-monitoring-process/AEOI-Commitments.pdf
3) UAE is not what it used to⁠ be. Banks follow stringent KYC and freeze/block accounts if they suspect of money laundery/tax evasion⁤ at the same time reporting information as per AEOI to the home country.
4) Only⁣ way to achieve peace of mind is by moving operation to UAE and staying in⁢ UAE for more than 180 days in a year to get tax residency certificate from︀ UAE govt and to get benefits under Double taxations treaty signed by India-UAE.
5) Under︁ section 271(C) of Indian Income Tax Act, there is a 100% to 300% penalty of︂ the tax evaded if someone is caught concealing tax.

Tread with caution when planning on︃ evading taxes.

 

[d12345]

@Sansion1956 I can give some input on two points.
1. 44ADA limit - Talk to‌ an advisor to see if you can change the "profession" thing to business and make‍ use of 44AD(only 6/8% is counted as income for taxation). It has a higher limit⁠ of 2cr. It can be done with the help of a good tax lawyer. you⁤ will need to make changes to how you invoice and contracts.
2. If you are⁣ only 20-30Lakhs above the limit and cannot do above, talk to your CA, you can⁢ make various deductions, expenses to reduce tax liability.
3. India does not have CFC rules︀ but has Place of effective management(PoEM) rules. These only apply to companies above with turnover︁ above 50cr(USD 7M) approx. Below this, you should be fine in regards to that.

 

[sjam]

Hi Sansion1956,
I’m in a similar︋ position. Wanted to see what you ended up pursuing with the UAE Offshore entity and︌ how you’re managing it with regards to POEM rules.

thank you very much